the public safety inspector implement implementedone of the last remaining recommendations for the 9/11 commission and created a nationwide interoperable public safety broadband network for first responders. it also provided new authority to the fcc to conduct incentive options with purpose of alleviating the spectrum crunch

fuelled by the ever-growing demand for mobile broadband service and providing a down payment for public safety network. overall the new law will help drive our national economic growth while keeping the american people save through state of the art communications infrastructure for public safety. the act was the result of months of bicameral bipartisan negotiations that included many elements of compromise. the federal communications commission is now grappling with several of these areas and i would like to highlight two in particular. the first is on license spectrum. unlicensed spectrum has been an incredible economic success story. innovative services like wi-fi and bluetooth are ubiquitous parts of our communications system. they came about because of the use of unlicensed spectrum. the lot advances the use in several ways of allowing the fcc

to use existing white spaces in the broadcasts than for unlicensed use, gives the sec the authority to reorganize the existing white spaces to maximize their value and perhaps most important it allows the fcc to create guard bans in the repurchased broadcast television spectrum that may be used for new unlicensed services like super why 5. this is smart spectrum policies that recognizes the increasingly interdependent nature of licensed and unlicensed operations. the bands will enhance the value of the spectrum to be auctioned by protecting it from interference and create a nationwide ban to prime spectrum that can be used for new innovation in unlicensed use. that is why i am pleased the fcc's proposed rules are faithful to congressional intent to promote innovation in

unlicensed use. second, the law preserves the fcc's ability to use auction rules to promote competition in the wireless industry while insuring no single carrier is unfairly excluded from the auction process. as steward of the public airwaves the sec must have the authority to write auction rules that aim to avoid the concentration of spectrum in the hands of a small group of companies. the act strikes a balance in recognizing that while every carrier should be eligible to participate in some fashion in this system of spectrum system of competitive bidding. the sec can continue to promote competition through special policies. to implement this part of the law the fcc is appropriately seeking comment on whether to establish spectrum aggregation limits or other rules to achieve

these aims. the conferees on the public safety inspector have spent significant time debating and rejecting other proposals of unlicensed and better eligibility. no conferees, position with accept it out right and carefully crafted compromise is what became law. so out of attempts by some 3 litigate issues that were resolved earlier this year when the bill passed congress with widespread support after the fact that unfairly twists the language of the law to little weight by the commission or courts. my judgment is the sec -- the fcc is off to a good start in proposing incentive auction rules. i commend chairman genachowski for these efforts and look forward to hearing all of your testimony today. if anybody wants it -- i will yield back to hear from --

>> the gentleman yields back the balance of his time and with that we will proceed the year testimony about witnesses and start with chairman of the communications commission, mr. julius genachowski. welcome back to our subcommittee and look forward to your statement and commend you on the work your commission is doing. please proceed. we seem to have a spectrum problem here. there we go. >> pleasure to be here, thank you for the many opportunities to testify and work with all members of this committee outside of the hearing process on work on this very import area. i want to take a minute to thank congressman terry and congressman bill oil when we adopted our low power fm order implementing bipartisan act of congress, a very special day the commission and commission staff. i thank both of you for joining us. this past week commissioner

mcdowell and i were part of the u.s. delegation to dubai where we worked together to defend free and open internet. i would note that members of committee staff on a bipartisan basis were there as well and we are fighting for internet freedom and openness. the situation in dubai right now is food, people are -- we have a strong american delegation on the ground led by ambassador kramer and including representatives from across government and the private sector. the situation is fluid. the issues are important and i think we all understand that this will not be the last conference at which these important issues arise and fighting for internet freedom and openness is something we will all be working on together for quite some time. in the u.s. the broadband sector is strong and the u.s. has regained global leadership in mobile communications. we have more healthy subscribers than the rest of the world combined, and setting the pace

globally on innovation and no software apps and devices. this means we face a particularly acute challenge to meet exploding mobile demand, the spectrum crunch and we must use all policy levers at our disposal to address some. a few months ago at the commission we free up 30 mhz for broadband, and yesterday we unanimously adopted an order freeing up 40 megahertz of underutilize satellite spectrum from land-based mobile broadband and opposes setting the stage for an auction of additional 10 mhz in 2013 and why later today i expect my colleagues and i to approve a proposal to make 100 megahertz of spectrum in a 3.5 gigahertz band available for broadband and of course congress recognized the importance of innovative policies solutions to the spectrum crunch in authorizing the commission to conduct incentive options. as a result of this important legislation, landmark legislation the u.s. will be the first country in the world to

conduct incentive options. our obligation is to implement the legislation in accordance with the statutes. with our vote on a notice of proposed rulemaking in september the commission launched implementation of the new law, implementation is on track. eagles and principals include maximizing the overall amount of spectrum freed up including by maximizing broadcaster opportunities for participation in the auction enabling continued role of helping broadcast industry generating very substantial revenue including providing funding, driving private investment, innovation and ongoing u.s. leadership in mobile, focusing on the engineering and economics, engaging with all stakeholders in a transparent process and doing everything we can to make a complex, multi part process as simple as possible. in my written testimony i outlined the significant steps taken since enactment of the statute to assure success. the new incentive option concept proposes a long list of new

challenges but we are focused together on smart solutions. our proposed wireless plan for 6 ended mhz consists of five mhz building blocks to allow for the greatest amount of flexibility and efficient optimization for the new mobile data world specifically anticipating the possibility for the first time that we might have more spectrum for downlinks than couplings which in a data world could make sense as compared to the symmetrical living love down drinks in a voice world. and those proposed trip and significant about the license spectrum for wi-fi lite uses and other innovations, both licensed and unlicensed specter contributed to u.s. leadership in mobile like option license spectrum, and license spectrum is a powerful record of driving innovation and investment and economic growth. ended the billions of dollars of value creation for the economy and consumer. the proposal puts out a balanced approach to drive investment and innovation for years to come and continue with u.s. leadership. we are also engaging

broadcasters in a constructive dialogue to meet statutory directives concerning repackaging and we look forward to comments on all of these proposals as well as ways to implement those option transmission with minimal consumer destruction and within the timetable set by the law. as we all know the implementation is in the notice stage. we put out a concrete proposal designed to generate concrete and efficient response from stakeholders, we will be looking carefully at the responses we get deciding issues on record and consistent with the statutes. with that thank you again for the opportunity to testify and look forward to answering your questions. >> as for the record thank you for thinking of my colleagues for coming down to the fcc, licensee of the fcc and broadcast row for 22 years i made sure to do everything possible to make sure never had to go before that. commissioner mcdowell, your testimony. >> thank you, ranking member

eshoo and all of you, thank you for inviting us. i share your goal of putting more spectrum into the hands of american consumers while raising funds for the treasury and the nationwide broadband public safety network. is important for all of us to remember that the fcc is at the earliest stages of developing rules to implement congress's rule regarding incentive options that will literally be the most complex in world history. initial comments are not due until next month. we have to call for a plethora of ideas and new questions we did not contemplate when we launched the rulemaking last september so consequently it would be premature for me to offer a final opinion on where the commission should go until this time for us to vote on them. unless being the only commissioner before you today who is also a veteran of two of the largest options in american history as well as the television transmission, seems just like yesterday, i have learned a lot through trial and

error, sometimes more errors than anything else. in the conversation today i hope i can eliminate a path forward based on past successes and failures. my entire testimony could be boiled down to one thing. the sec should approach these options with simplicity, humility, and regulatory restraints. almost four minutes left. i will go on further. through intelligently designed plans and service rules we can provide opportunities for all stakeholders and potential new entrants to successfully participating in auctions. similarly we should avoid micromanaging the wireless market through unnecessary rules that would deter bidders and reduce auction revenue. the goal of maximizing revenue especially important here due to congressional mandate that part of the auction proceeds fund construction of the new nationwide public safety network. furthermore we should keep in mind that technology advances

constantly and what may seem impossible to achieve today may be routine tomorrow. let's not underestimate market innovation or worse, let's not inadvertently preempt it. beyond the spectrum auction american policymakers should continue their vigilance against encroachment on internet freedom especially internationally, chairman genachowski and i worked in dubai last week and members of your committee staff to prevent the international telecommunication union from expanding its reach into the internet complex ecosystem and as the chairman mentioned, it is a crucial time, as we sit here it is night time in dubai, a crucial interception and the next 12 to 24 hours will determine the fate of things, but if we are lucky enough to have internet freedom to escape this year, we have to remember

there's a more fundamental negotiation in 2016 and there's a big meeting in may that lays the foundation for that. we shall keep that in mind. i would like to thank this committee for its unanimous and bipartisan resolution opposing even the smallest of international encroachment on internet freedom. in the meantime, i hope we can all share a new year's resolution to close the title 2 docket and my hopes may not be realized i realize, but ending this proceeding would send a strong signal round globe that the u.s. opposes objecting the internet too late nineteenth century industrial policy. instead of new regulation in this space we should revive a concert by proposed five years ago and that is to use the tried and true multistate older model to resolve alleged anticompetitive conduct that would threaten the open internet, supported by the backstop of existing antitrust and consumer protection laws the

multistate colder model could spotlight market failures and can cure them more quickly and more effectively than antiquated telephone laws. if this concept is good enough to preach abroad, shouldn't we also practice at home? thank you and a look forward to your questions for the 46 seconds left on the clock. >> we will make note of that. thank you. now we go to the hon. commissioner mignon clyburn, look forward to your testimony. >> distinguished representatives, good morning, thank you for the opportunity to discuss the fcc's efforts in implementing the historic legislation you passed earlier this year. i respectfully request my full statement to be admitted in the record. >> without objection. >> over the past few years consumer demand for wireless services has increased by startling rates. these realities require the

nation put in place targeted yet nubile legislative and regulatory policies in order to keep pace. that sometimes it is hard to believe this, but when i first started at the commission in the summer of 2009, tablet devices had not even been introduced to the u.s. consumer. now, according to the most recent data for this year, 22% of american adults own such a device. when you consider these statistics, together with the fact that tablets' assume 121 times more spectrum than ordinary cellphones, then you realize that two elements of spectrum management have become critical policy priorities. first, we must find a quicker ways for commercial mobile services and second, we must promote more efficient uses of spectrum. congress understood this when it

passed the job act of 2012. the plain language of the statute makes clear that through voluntary incentive options we have the authority to find a quicker tool to reallocate spectrum. congress directed the incentive option of broadcast television spectrum consists of three major features, reverse auction, repackaging of the broadcast tv ban and a forward auction. for those broadcast tv licensees who want to continue to use their spectrum to provide services, the commission must make all reasonable efforts to preserve their coverage area and population served. i am pleased to report the commission has been moving quickly to implement these statutory directives. just two months after enactment, a unanimous three member commission released an order that put forth basic ground

rules for the channel sharing aspects of the incentive option. this past september, the commission at full complement unanimously adopted a notice of proposed rulemaking on the full range of procedural and technical rules that it could adopt. that notice proposes a ban plan with six mhz that meets the statutory requirement that there are no larger than technically reasonable to prevent harmful interference between licensed services. it seeks comment on the proposal. i believe it was important for the notice to propose a ban plan with an appropriate balance of licensed and unlicensed spectrum. section 6407 of the act authorizes the commission to permit the use of such bans for unlicensed use. unlicensed spectrum has played a critical roles in helping the

wireless industry use its valuable resources more efficiently. commercial wireless carriers are increasingly using unlicensed wi-fi services to offload their smart phone traffic, resulting in wireless carriers not having to construct an estimated 130,000 cells sites and savings of more than $25 billion each year. the unlicensed spectrum proposals in the notice would also encourage development of wireless services that can make effective use of unused specter more white spaces in a broadcast tv ban. it is also clear that continued innovation into unlicensed service industry is important to the nationaleconomy.as represen out is estimated on licence spectrum generate 16 to $37 billion each year for the

u.s. economy. the incentive option notice also appropriately seeks comment on ways the commission could design the incentive options to accomplish all of the funding goals of the act including funds for first national first responder network. thank you for allowing me to make these opening remarks. i look forward to any questions you may have. >> thank you for your testimony. i will now move to commissioner rosenworcel. we look forward your comments as well. >> good morning, members of the subcommittee. it is an honor to appear before you with my colleagues to discuss our progress in implementing the incentive option provision of the middle-class tax relief and job creation act. the commission embarked this past september on the complex the critical task of conducting wireless incentive options. we must get the right because if

we get from right we will facilitate the voluntary return of spectrum from commercial licensees and promote its 3 u.s.. if we get the right we will ease congestion on our airwaves and expedite the development of new wireless services and applications and if we get the right we will drive digital age innovation for job creation and grow the wireless economy but before we get there is useful to consider what has come before. for nearly 2 decades the commission's spectrum auctions have led the world. the agency has held a the auctions and issued more than 36,000 licenses and it has raised $50 billion for the united states treasury. in short the commission's options have been a model for government and commercial wireless providers across the globe. we are now again poised to be

the world's pioneer with incentive options. for my part i believe there are four principles that should guide us. simplicity, fairness, balance, and public safety. simplicity is the. incentive options are undeniably complicated but in every structural juncture a bias toward simplicity for participants is crucial. simplicity will allow the market to work and yield the most favorable participation. fairness is essential. fairness demands that we consider how to accomplish repackaging by minimizing unnecessary broadcaster disruption and maximizing the ability of the public to continue to receive free over it the air television. at the same time we asked broadcasters make a fair assessment of opportunities the auction provides by offering incentives to share channels and incentive to relocate from the

uhf to vhf band, this can mean new resources for broadcasters to develop new programming and deploy new services. balance is necessary. none of the three legs of the incentive option, the reverse auction, the repackaging for the 4 option can stand on its own. for instance, the interference rules we consider one not only impact broadcast services but also how much spectrum will be available for options which in turn will impact the revenue raised. we must also pay attention to the balance between licensed and unlicensed spectrum. the former provides reliability and interference protection, the latter provides low barriers to entry and promotes efficient use of limited resources. good spectrum policy requires both. finally, public safety is fundamental. congress designated option revenue to the court's first

nationwide interoperable wireless broadband public safety network. the recent storms in the northeast have provided a stark reminder of the importance of communication in a disaster. the success of these options required delivering on our promise to america's first responders. even with incentive options on course the demand for our airwaves will continue to grow. to meet this demand, efficiency is critical. at the fcc efficiency means getting all of our options done on a clear timeline. for industry efficiency means squeezing more out of the spectrum already allocated for commercial use. now is the time to invest in technologies, geographic, temporal and cognitive that multiplied the capacity of our air waves. finally for the federal government's efficiency means finding new approaches that facilitate repurchasing of the

spectrum better than the old three step process of clearing, relocating and auctioning. to this end i believe it is time to develop a series of incentives to serve as catalysts for freeing more federal spectrum for commercial use. what if we were to financially reward federal authorities for efficient use of their spectrum. if we want to convert more airwaves to commercial use i believe it is time to work with our government partners so they can realize value from using specter me efficiently instead of only seeing loss from its reallocation. it is an exciting time in communications. incentive options present real challenges but they're smart specs accusing can yield great opportunities. thank you for your time. i will be happy to answer any questions you might have. >> we appreciate your testimony. we go to mr. pablo is thank you for being with us, look forward

to your testimony. ajit varadaraj pai. >> it is a privilege to appear before you today. the spectrum actor originated in this subcommittee and was the result of bipartisan leadership, hard work and compromise by you and many other dedicated members of congress. given the pressing need to make more spectrum available for mobile broadband the sec must act promptly to implement the act. accordingly this past summer i called for the fcc to commence the incentive option rulemaking process in the fall. chairman genachowski launched a timely proceeding in september and i thank him for that and as well for his recent announcement of the formation of a technology transitions policy task force which will address crucial issues that we will encounter as we undergo the transition. as the commission moves forward in the rulemaking process i believe four principles it animate our work. first, we must be faithful to

the statutes. it is our job to implement this legislation. not to rewrite it to conform to our own policy preferencess. second, we must be fair to all stakeholders. this is especially important because the incentive option will fail unless both broadcasters and wireless carriers choose to participate. third, we must keep our rules as simple as possible. the auction will be complicated enough as is. fourth and finally, we need to complete this proceeding with any reasonable time frame. i believe that we should set a deadline for concluding these options no later than june 30, 2014. fidelity's to these four principles will result in a successful broadcasting center option. that said, i have some concern with the direction of our rulemaking proceeding most notably september's notice of

proposed rules of the making appears to envision an option that will yield no net revenue. that would mean no money for the first responder network authority to build out nationwide interoperable public safety broadband network. that would mean no money for state and local first responders, that would mean no money for public safety research, that would mean no money for deficit reduction, that would mean no money for next generation 911 implementation even though the spectrum act specifically mentions each of these items. most of the problem in my view stems from the structure of the proposed option. the only closing conditions set forth is revenues from the former option cover the cost of the reverse auction. this is like ending traditional option as soon as the reserve price is matt. another part of a problem derives from limits the sec might place on auction participation. if we start picking and choosing

who may participate in the fourth option that won't be good for anybody. by contrast maximizing participation will maximize our net revenues. as we set up the auction i hope we take to heart the guidance that we receive from commentaries and importantly from congress. aside from a broadcast incentive option, the specter mac said several additional targets for getting more spectrum to market. for example i expect in the near future it that we will commence a rulemaking proceeding and making available almost 200 megahertz of spectrum for unlicensed use in the five gigahertz band. this is a legal obligation under the specter mapped but i am particularly excited about it because it is smart policy. the standard for next-generation wi-fi 802118 c has been developed and requires large continuous loss of spectrum for

high-capacity, high-speed data transfer. the 5 gigahertz spectrum identifies in the specter mac, is well-suited for taking advantage of this innovative standard. the specter mac also directs the sec to auction off the 2155 to 2180 megahertz band which is adjacent to a w. s. 1. the spectrum ideally would be paired with another 25 megahertz block, the 1755 to 1780 ban. these bands already are internationally harmonize for commercial use which means deployment will be swifter and cheaper than other options. if we auctioned off the spectrum and the next two years it could raise billions of dollars. the productive collaboration among the sec, the end cia, commercial users and federal users, we could achieve the twin goals of the efficient commercial use and effective federal use. in closing, this gave the sec

some challenging tasks but if we accomplish them our nation's commercial and public safety communications capabilities will improve dramatically. chairman walton, ranking member eshoo, members of the subcommittee, thank you for holding this important hearing, i look forward to listening to your views, answering your questions and continuing to work with you in the weeks, months and years ahead. to implement this landmark legislation. >> thank you for your testimony, thanks to all of you for coming today to testify before our subcommittee. i like to put the record three letters, one from the expanding opportunities for broadcasters coalition announcing a coalition of 25 broadcasters at this early stage who are interested in selling this specter met major markets. a letter from the telecommunications industry associations for efforts to maximize license spectrum for mobile broadband and a letter from a high tech spectrum

coalition supporting swift implementation of the spectrum of. without objection they will be in the record. commissioners, obviously we have a lot to cover today so thirsty yes or no question, i want to start with ajit varadaraj pai. do you think the commission should insure that the commission produces the $7 billion for public safety network? >> i do believe the commission should focus on maximizing revenue for the network. >> absolutely. we need to deliver on our promise to our first responders. >> absolutely. >> mr. mcdowell? >> yes. >> chairman genachowski? >> yes. >> i want to ask unanimous consent to include this in the record. the chart they are about to put up will show you the sec may be foregoing as much as $19 billion potentially with its guard ban and unlicensed proposal.

you all have copies of this before you. ajit varadaraj pai, before the public safety, and as to the broadcaster's the relinquished spectrum and reimburse stations to relocate so we can't know in advance how much that will cost or how much spectrum broadcasters will relinquish or how much the spectrum will sell for. are you comfortable forgoing a single dollar of potential revenue? >> i am not and that is one of the reasons why in my separate statement on september 28th when we adopted the notice of the truce rules of the making i expressed my concern closing conditions did not appear to envision a circumstance in which this would not yield net revenue and proposed asking questions, should we go beyond the structure of the option which at this point as i understand it means to save a forward auction will close once there is sufficient revenue to pay the reverse auction and paper reimburse costs in the spectrum

act and the cost of administering the option. i share that concern and the closing conditions that will ultimately do adopt should be structured to maximize that revenue for this reason that you identify. >> for those who cannot see the slide, what it shows is the spectrum that is available for auction in blue, that does not mean will all be auctioned or there will be that many stations that come forward to give up their licences but that in theory is could be available and in the red is channel 37 and yellow is the remainder and green -- obviously there will need to be guard bands and some of that will be auctionedable and all that but i want to put in perspective that even at conservative dollar per megahertz pop the sec's plan could forgo $7 billion growth and that would be enough to fully fund, these are big numbers we are talking about,

these are programs congress has already said need to be funded through this option and we have also used allocated the other net revenue from the proposed auction already spent to extend that middle-class tax cuts and to extend unemployment -- pay for all of that which is part of the big compromise that got this into the lawn. my concern is if we take spectrum of of the table, there won't be revenue potential to pay for the things we have already committed to and it goes in the unlicensed world. >> looking at this chart for right now, it could be very generous. 55 mhz, the assumption broadcasters will be able to yield. i am a little skeptical that we can yield that much for auction and i hope i'm wrong. i will be the happiest person on earth if i'm wrong about this but i'm skeptical that it will be that much.

this is a variable portion of how much can be auctioned. the fixed portion is already here. this is minimal amount of 12 megahertz and you have six for channel 37 and the remainder. this is a fixed portion. i want to point that out. that is a guaranteed amount that won't be auctioned. what is often does not guarantee. there are a lot of assumptions and lastly at $1 per megahertz pop in the 700 mhz option of 2008, the a and b blocks which releasing cumbered went for $2.70 per megahertz pop in some cases. >> this could be worth three times we are showing. >> exactly. it could be $14 billion or 1416 or something like that. we are talking a lot of money even in washington. >> that is the issue here. i know we're having a debate about how much should be available, there are others being put forward, i know we

have some disagreements with the subcommittee about the statutes, what it says or doesn't say and we will get to that a little later. i will recognize the gentlewoman from california, miss eshoo for five minute. thank you. i hope we will have another round because there are a lot of questions that need to be asked. i am troubled by the claims of the public safety spectrum act is all about revenue raising. the last time i checked this is the energy and commerce committee, not the budget committee. having said that, i think we did a good job to bring about a balance, to bring about the dollars that would fund the public safety network, that we would produce dollars for deficit reduction, but again, this is the energy and commerce committee, in section 309 of the

communications act explicitly prohibits the fcc from basing its auction rules predominately on the revenue that would be generated and during the bipartisan negotiations on this bill compromise was reached to allow unlicensed services to operate in the guard bands that would be created as part of the band plan which would not be auctioned. the cbo looked at the proposal that became law and concluded that the guard band concept does not decrease the revenue. i don't know where all of this is coming from. i think it is kind of interesting but it seems to me that again the hearing today is keeping the new broadband spectrum law on track. i want to start, mr. chairman, mr. chairman, the commission might know is currently, this is a little off of something else but i am very curious about it because it is so important. the commission is currently

undergoing a review of the media ownership rules and though i recognize no agreement has been reached within the agency i would like to know what is being done to respond to the third circuit instruction to address the ownership and the viewpoint of diversity, if you could be brief, because i have a whole bunch of questions. >> diversity is a corps obligation and something we care about deeply and have been focused on. we have overhauled our data collection on broadcast ownership so we finally are getting accurate information about ownership. we have a major study underway right now all, looking at the issues that are required in this area in order to support legal action and we requested funding in 2013 for additional studies to do the work we need to do overtime. and the reviews that we have to undergo, the one we're looking

at now is a 2010 review that started in 2009, they continue on an ongoing basis. time to get the one before us is done but we will move on to the next one and continue to look at diversity as a central objective of the commission. >> on this whole subject matter of me and consolidation, there should be an underlying principle that in a democracy there should be as many voices for the many as possible. this goes to the heart of democracy. this is not just something to fiddle around with. so i just wanted to put that out there. to the chairman, some have argued that the fcc proposal on the licenses represents an unlawful give away. how do you respond to that? >> as you set the statute, clearly gives the commission the authority, i would add one point to the one you made before which

is that any economic value analysis of spectrum methods would have to look at hundreds of billions of economic value and related tax revenue that have come from innovation on license platforms. when the sec licensed the use for the first time no one predicted y 5. with a new platform for innovation that together with license spectrum has made as a global leader. when i talked to my counterparts overseas they're very focused on the opportunities, they are looking at next generation unlicensed and if we don't lean into this we run the risk of falling behind. we will operate within the confine of the statute which both sides of the aisle have carefully constructed. >> thank you. to commissioner mignon clyburn, on the better eligibility, do

you believe consumers would be harmed if the incentive options freed up the specter miss that was only acquired by the two largest wireless companies? >> i believe the fcc should keep in mind as we crack these rules what one of the core missions of this agency is which is competition and i believe that we should again craft these rules to insure that the framework and the environment would promote competition, it is good for innovation and investment and so we have to look at it in a broad framework but never forgetting our mandate to provide competition. >> to commissioner rosenworcel, wonderful to see you and to hear your testimony. we have heard suggestions today that auction moves promote competition, could result in lower auction revenue.

isn't it also true that allowing one or two firms to shut out other competing bids could result in less revenue? >> i think that is possibly true but fundamentally we need to hold these auctions in a way that there are opportunities for everyone including incumbents and new entrants and we need to make sure the revenues we raise our sufficient to support the first responder network authority. >> two bookends, money and real competition. >> terrific. >> yield back. >> the chair recognizes vice-chairman of the committee. >> we will go with the chairman and this one. we all believe the auction should happen as soon as possible but getting the rules correct. broadcasters have expressed concern about the folks who will

lose the signal if broadcast concourse change from repackaging. what is the commission doing to address this concern? is there a further npr notice of proposed rulemaking that will delay the process too much and is there an alternative approach to addressing this issue? >> in the statute congress addressed this issue and laid out guidelines the commission has to follow. those issues where the up in the notice of proposed rulemaking and expect comments on that in a position to make a decision. meanwhile we are engaging in direct dialogue, workshops, and other ways to engage directly with broadcasters, broadcasters like chairman walton mentioned who are looking at participating and those focused on

repackaging. >> following up on the gentlelady from california's theme, i will move to the commissioners mcdowell and mignon clyburn. many have argued there should be no spectrum cap. do you think the current spectrum screen with a safe harbor of 1 third of the troubles -- total spectrum is sufficient to protect consumers and create more competition? mcdowell first. >> i do and express my concern when we launched our spectrum aggregation about reverting back to the days of the hard spectrum cap that might be under different name or have a different way of approaching it but it is a lot like real-estate and you have to look at each transaction on its own unique case by case characteristics and

what was considered apples and oranges in terms of different frequencies a few years ago, today is no longer the case. is being built above 200 gigahertz and below one bigger heard for instance so the same services there being billed at frequencies that a few years ago were thought to be very different in their propagation characteristics so we need to be careful about where that could go. >> one of the things i keep in mind and go back to the competitive landscape which is optimal for us and we need to keep that as we draft policy and in terms of the spectral aggregation currently, we have not looked at that proceeding, there has been no reform or adjustment since 2003. the time is right for us to look

at policies, there have been changes in the environment. ..

. >> in my current view, the current screen does a good job of that. >> gentleman's time's expired. chair recognizes the gentleman from california, mr. waxman, for --

>> thank you, mr. chairman. we had our differences on this committee and with the senate, and we finally reached a compromise, and we settleed by agreeing to allow the fcc to utilize guard bands that might allow both unlicensed and licensed uses to flourish. we understood this to be a good compromise that showed unlicensed and licensed uses did not have to be mutually exclusive. unfortunately, some are now suggesting that the fcc's proposal to create the guard bands contemplated in the legislation is an unlawful giveaway. chairman genachowski, do you think weave we've -- we have to decide between the licensed or unlicensed model? is there an opportunity to include a band plan that includes both? >> no, i don't think we have to make that decision and, yes, there is the opportunity to create a balanced band plan that uses both licensed and unlicensed and maximizes the economic value created for the country. >> some have expressed concern

about guard bands that are too big or not technically reasonable. how will the fcc determine the appropriate size for any guard bands? >> well, on a record based on the engineering and input we get, we made a proposal that's based on our expert staff which we believe in the first instance is technically reasonable, and we'll consider all the comments that come in. >> why do you think that start-ups, innovators, technology companies -- many of which populate ms. eshoo's district and my district -- care so much about unlicensed spectrum? i've heard from the cable industry that it is critical spectrum located in the television bands be made available for unlicensed use. >> because it's an extraordinary platform for innovation. it has been proven to be that when it was first done 20, 30 years ago, it was a theory. now we know. and we have dmawcial -- [inaudible] now, do we expand on this good

idea or let other countries do it before us? the innovation will go to the country which builds the most structure. >> and how do you explain can cable industry support, what you're trying to do with regard to making sure there's unlicensed spectrum available in the broadband? >> they, too, have been looking at unlicensed and using it to provide alternative broadband access to consumers. innovation can come from silicon valley or anywhere, we want to utilize all innovation. >> you gave a speech in which you suggested there is a war on wi-fi. what did you mean by that? >> i think i asked why anyone would want to launch. a war on wi-fi, and it's really the reasons we're talking about. my view is that we should lean into it consistent with the

statute and anticipate that american innovators will take advantage of new platforms for innovation and invent things that we can't even imagine now. >> i thank you for that clarification. this is an important provision, it was very important to people on this committee and the compromise, i thought, was a good one to allow this kind of innovation to be able to go forward. commissioner rosenworcel, how will the adoption of next generation 911 benefit american citizens and fist responders, and do you believe this is an important component of the fcc's public safety mission? >> yes. i think the -- >> your mic. >> yes. i think the first duty of a public servant is the public safety, but it's not just my opinion, it's the law. it's right there in the first sentence of the communications act. next generation 911 is going to improve all our safety. in the future we will have a

world where every call into our 911 centers may be accompanied by videos, photographs and your medical records. it can make us all safer. but the challenge is getting from here to there x that's going to take three things. first, it's going to take technical standards. the fcc's at work on that with our public safety colleagues. second, it's going to take a lot of coordination. the agency will need to work with the more than 6,000 public safety answering points around this country as well as carriers to produce that kind of outcome. and finally, it's going to take funding. and to that end, i would note in the middle class tax relief as a result of this committee, there is up to $115 million in grant funds available for next generation 911. that's a terrific resource, and it's my hope that the public safety answering points from around this country will benefit from that. >> thank you. and, commissioner clyburn, if i could squeeze in a question to you, you've been an advocate for

wireless consumers and the importance of or competition as more americans, especially economically-vulnerable populations, rely exclusively on wireless service. do you believe consumers will benefit in the upcoming incentive auction? >> absolutely. competition, when the markets are healthy and robust, there are more opportunou know, moreptions, and that is good especially for lower income consumers. there is not a one size fits all. i don't take a one size fits all from a regulatory standpoint, and i believe that i should help promote that in the competitive market standing and framework. >> thank you very much. thank you, mr. chairman. >> gentleman's time has expired. chairman recognizes mr. shimkus for five minutes. >> thank you, mr. chairman. and welcome to the commissioners. first, relate me mention -- let

me mention how pleased i am we're working collaboratively on the 911 issue. that's what gets used today. they move away quicker than we do, and the reports that i'm reading are true, then i like what's going on, and that's what we would hope, that we'd be working with regulators and the industry to resolve an identifiable need. so kudos, congratulations, and i would say keep it up. obviously, the goal of this was to do two things. one was to have spectrum available and also try to help fund this, and that's kind of where this debate is going. and being part of kind of what anna said, you know, it is a keeping the new broadband spectrum law on track kind of like an oversight hearing, and a lot of us are asking questions pertaining to that. i was also, chairman, i was

appreciating this, because when we talk about the guard bands, it just raised the historical aspect of lightsquared. i had great hopes that it would provide wi-fi to rural, small town america, but -- and i like gps, we all use it, but i think they cyber squatted on spectrum that budget there. there was nothing there to protect the spillover, and we lost this great opportunity for rural america to have high-speed internet access. and so i think that's part of this debate of how much is too much, where is the band so we don't have encroachment, but we also get full compensation. is that kind of the debate that we're having, do you think, chairman? >> well, i think the discussion about how to get this exciting new opportunity right is the one that we're having. the incentive auction law was a landmark piece of legislation i. involved a lot of people, and

the obligation is now on us consistent with the statute to get the balance right and to do something that drives u.s. leadership in mobile, that raises very substantial revenues for the treasury and that drives private investment and innovation including through things like unlicensed which the statute anticipates in guard band. >> part of the legislation was to make sure we had the funds also to deploy. and because, you know, part of that debate was, you know, some people were saying, well, there's not enough money, we'll just go back to congress and give us more, and we're just not in that world --? >> if i could -- >> we're expecting et to come through this process. >> there's one piece here that i look forward to working with the committee on which is the channel 37 piece on the start, i i think we share your interest in freeing that up for auction. and as we looked at it in our notice process, we saw a much higher amount of actual use than we would like, and the congressional authorization for the amount to clear that

spectrum at 300 million, we believe at this stage, won't be enough. and this is an area where i do think we can work together on a bipartisan basis, perhaps clear channel 37, and i hope that's an area we can follow up together, because it's a way to get more licensed spectrum up for auction and also move forward on unlicensed. look forward to working with you on that. >> well, and that would be an interesting process because of the full deployment in that channel and what it does. it's almost like moving military spectrum -- >> that's why we haven't proposed auctioning it, and other things on this chart really aren't reversible decisions if that's true. >> right. so let me end with a question to commissioner rosenworcel and commissioner pai. there's always been a large debate, we've never really moved on on just restructuring, reorganizing. you're relatively new. having observed the process in the short amount of time you've

been there, what are your thoughts about how we can really move the commission from the copper wire era to today in and what would restructure look -- i have a minute left, so if you could kind of split that time, that'd be helpful. >> well, i think in part you're referring to the task force that the chairman just put in place, which i think is a very good -- >> or your ideas. >> excuse me? >> your ideas. >> i mean, he -- >> all right. i will say that years ago we used to exist with a wire line, copper line into our houses, but the networks we use today are far more diverse. one-third of our households only have -- >> so how to reform the commission? we know that. i mean, how do we reform the commission? >> well, i think part of the reforming the commission is understanding the networks that are out there and making sure the structure reflects those networks.

so we do haven cans about how we look at this as a matter of silos today where we treat cable defermently than we might treat wireless or broadband and harmonizing across those platforms to reflect the way we use networks today would be a good idea. >> chairman, 30 seconds for mr. pai, without objection? >> i'd just add to my colleague's answer. there are two basic questions as we undergo the ip transition that we need to be piebdful of. number one, what role, if any, should the copper era have in the world of ip? in my view, it should have relatively little to the extent that those types of regulations no longer make sense where we have conversions across different platforms. then are there any particular social goals that we should try to achieve in the all-ip world that we feel are important? when somebody calls 911, should it matter if they're calling on a land line, wireless phone or voip application?

so those are going to be central challenges for the commission, and that's part of the reason that i'm glad the chairman announced the task force which i first called for in july because i think this really is the biggest challenge we face at the fcc. >> gentleman's time's expired: we now recognize the honorable gentleman from michigan, mr. dingell, for five minutes. >> thank you, mr. chairman. my commendations for in this hearing. and we need to do what we are doing, and i commend you for that. these questions will be yes or no. first to chairman genachowski. mr. chairman, section 6403b of the spectrum act requires the commission to coordinate with canada and mexico when authorizing the reassignment and reallocation of beside cast frequencies -- broadcast frequencies. is that correct? >> yes. >> mr. chairman, i would note that similar such coordination took place for the dtv

transition and that it took a very long time. is that correct? >> yes. >> mr. chairman, will the commission commit to negotiating new arrangements with the state department, canada and mexico as mentioned in paragraph 34 of the commission's notice of proposed rulemaking before repacking broadcast frequencies, yes or no? is. >> i'm not sure of that provision, but we are committed to working with canada and mexico. >> is that a yes or no? >> i'd have to look at that provision to give an accurate answer. >> the law requires you to do it. >> we will comply with the law. >> i hope so. [laughter] mr. chairman, section 6403b2 of the spectrum act requires the commission to, quote: make all reasonable efforts to preserve as of the date of the enactment of this act the coverage area and population served of each

broadcast licensee as determined using the methodology described in oet bulletin 69 of the office of engineering and technology. does the commission intend to define explicitly what such reasonable efforts will constitute, yes or no? >> yes. that's part of our decision. >> mr. chairman, does the commission expect to have to find such reasonable efforts, yes or no? >> yes, as part of our decision. >> mr. chairman, paragraph 49 of the nprm states, quote: the allotment optimization model may have limited or no applicability to this proceeding. the commission states in paragraph 50 that, quote: it expects interested parties will have an opportunity for

meaningful comment on all specific repacking, repacking methodologies. it is considering before it makes a decision, closed quote. does the commission publicly commit to sharing with the public the repacking methodology it adopts as well as the variables and other inputs it may use to predict repacking results, yes or no? >> yes. >> that's a big question. i had a hard time getting it out, i'm sure you had your share of difficulty too, mr. chairman. [laughter] mr. chairman, i note the commission has had a proceeding pending on its spectrum screen since september of this year. does the commission intend to complete this proceeding before releasing rules for the voluntary incentive auction authorized by the spectrum act, yes or no? >> yes, that's our plan.

>> ah, mr. chairman, on a related note, does the commission intend to use its authority under 309j of the communications act to insure broad participation in the voluntary incentive auction authorized by the spectrum act, yes or no? >> yes. >> mr. chairman, the commission released a technical paper by the staff in 2010 which concludes that an additional 275 megahertz of licensed spectrum will need to be cleared in order to meet rising consumer demand for mobile broadband. does the commission believe that it can achieve that goal, yes or no? >> yes. >> mr. chairman, other than incentive auctions how does the

committee intend to meet that goal? >> well, by freeing up spectrum through removing regulatory barriers like we did just yesterday and also a few weeks ago with wcs by recovering more spectrum from the government through spectrum sharing approaches, through clearing and reallocating government spectrum and through unlicensed spectrum. >> mr. chairman, thank you. we in the worlder states are very much concerned about what sort or will happen to us in this process; losing service, seeing stations go dark, seeing additional confusion and conflict with our neighbors to the north and south. i hope you'll keep that in mind as you go forward. mr. chairman, i ask your kindness in just one thing, and that is to commend commissioner clyburn for her work on --

[inaudible] calling petitions before the commission. i appreciate the progress the commission has made on these petitions and encourage the commission to resolve these matters as expeditiously as possible. mr. chairman, members of the commission, thank you for your courtesy to the committee today. >> thank you, mr. dingell. mr. barton, you're recognized. >> thank you, mr. chairman. i'm tempted to yield back to mr. dingell just to let him continue asking his yes or no questions. sooner or later, he'll fete to one that -- he'll get to one that they can't answer. but chairman dingell did ask a question that i'm going to put a little bit different slant on. he referred to that part of the h.r. r. 3630, the new law, that the commission in making these reassignment or reallocations shall make every effort, every reasonable effort to preserve the existing population and coverage area for each broadcast

licensee. over on the next page, on page 72, subparagraph 5 with regard to low power television usage, it says nothing in the subsection shall be construed to alter the spectrum usage rights of hoe power television -- low power television stationings. yet in the fcc, um, power point presentation in response to the question can low power television participate in the reverse auction, the answer to that is, no. i understand that part of it. it says low power television services have only secondary interference protection and must make way for full power and class a tv stations assigned to new channels. i understand that. but then they go on to say that they have to promote, they may be, they may be required to go to a different technology mvpd

systems and/or the internet. now, i can't speak for the entire committee, obviously, or even the subcommittee, but i can speak for myself who's been a member of the subcommittee and who supported the enactment. we -- i didn't envisions that we would have the end result that a low power television station would simply end up off the air. and so i would like to ask the chairman and the other commissioners if, in fact, you're willing to commit that low power television stations that have acted in good faith, they understand that they may have to move or be repacked. but i personally believe it's not fair at all that the end result is that a low power television station that's been a good licensee ends up totally off the air. >> well, these are questions that we asked in our notice.

congress did not change the status of the low power stations, and so they remain secondary services. many, as you point out, provide valuable programming in their communities. our job is a hard one which is how do we free -- maximize the spectrum that we free be up, generate revenue for the treasury and for first map and also, um, address the issues you're raising which are the number of lp-tv stations around the country that are providing valuable programming. it's a difficult question which we have not answered yet. we look forward to working with you and getting very robust input from our -- >> but can we agree, again, the low power television stations understand that they're secondary. they understand under current law that they provide service only if it doesn't interfere and as the full power stations and the class a stations operate, they have to work around them. they understand that they don't have the right to participate in this auction. the one thing that they are not

willing to agree to is that they can be just kicked out of business, kicked off the air, and that's. can we agree as a committee and with as a commission that we're going to take steps to make sure that if a low power station has operated in good faith and complieded with its existing license that we will make an effort to deep them on the -- to keep them on the air? >> some -- >> not necessarily on the same channel, but at least in the same market? >> we will work with the lp-tv community. we have an obligation to act within the statute. certainly, keeping lp-tv stations on the air where we can is something that makes sense, but i think at this point we haven't made a proposal on this. we have an obligation to listen to the record, act consistent with the statute, and we'll continue to work with you and other members of the committee and the lp-tv community to, ultimately, reach the goals of the statute, some of which, as you point out, are at --

[inaudible] with each other. >> i'm going to ask the new commissioner, mr. paiu do you believe that the current forward auction smuggles outline that's been outlined is really work signal. >> it is certainly a novel construction which is necessary since, you know, the entire incentive auction presents questions. the first impression as the congresswoman pointed out in her opening statement. i think the simultaneous has the advantage of certainty in realtime as to what spectrum will be available. but there are, obviously, some complications. participants in the reverse auction respect necessarily -- aren't necessarily well versed in auction processes, and they might not know exactly what the nature of the auction is going to hold for them. on the forward side, you know, the bidders might not know what spectrum they're bidding on

which inhibits, obviously, their ability to form a coherent strategy. i'm hopeful ha in the d that --t congress will give us a wide range of process to understand whether the simultaneous approach is the best one. >> well, i would encourage the staff and the members of the committee to keep an open mind on this because we have conflicting goals. we want to maximize revenue for deficit -- [inaudible] we want to preserve the rights of the existing licensees that don't can wish to participate in the auction. when you put that all together, it's very difficult to come up with a system that actually makes sense. and i would hope y'all keep an open mind on how to do that. with that -- >> thank you, mr. barton. chair recognizes the gentleman from massachusetts, mr. markey, for his five minutes. >> thank you, mr. chairman, very much. mr. chairman, could you help us to frame this tension that

exists under existing law? that is, that what we're trying to do is make new spectrum available for the wireless revolution while at the same time insuring that broadcasters are protected, that they only have to act a voluntarily, but that there's proper protection against interference. so what is the process that you have established that telescopes the time frame to insure that that issue is resolved and done so in a way that meets all the technical requirements but forces the parties who sometimes have a stake in just, you know, waiting until eternity to finally just get to the point where they accept the reality of the technology? >> two points briefly. one, on the time frame, this is why we moved so quickly to start the nprm. we've announced we intend to hold an auction in 2014, and we

will drive this step by step to a conclusion. the second point on the framing, what many people don't realize is that in most major markets in the u.s. today, there are many more over the year to be licensees than people realize. in new york, where i'm from, the number's 28. and there was a large allocation of these licenses before cable and satellite. and what we're doing now, and this is, i think, the innovation of incentive auctions is to say how can we use market mechanisms to reallocate some of that spectrum to mobile broadband in a win very win way? >> uh-huh. >> and that is what we're doing. that is why there will be broadcasters who remain in markets like new york and others who are healthy and, indeed, stronger. but there's also tremendous opportunity to generate revenue and promote innovation. >> when we moved over the 200 megahertz, we had a two-star general sit here and say you just can't do it. it's technologically impossible

to do. so, again, do you have a process that's totally fair to the broadcasters and to the wireless industry that's in place? have you had them in your office simultaneously with their engineers to talk about the issues so that you can hear and your experts can hear the differences which they have? >> that's exactly what we're doing. through the notice in common process, also through the workshops, also through direct engagement with our engineers. that's what i've said to both industries which is get your engineers working, because we will resolve these largely as engineering issues consistent with the economic and innovation goals of the statute. >> do you ever have a meeting yourself with the engineers in the room with the other, you know, from all industries just sitting there with your engineers hearing the disagreements and -- >> i very much end joy meeting with engineers and business executives, and i won't express an opinion who's less fun to meet with. >> okay. no, i appreciate that.

let me just say last year the economists magazine predicted -- this is hyperbolically, i think, the economists predicted that the expected economic benefits of unlicensed spectrum alongside finding a crack in the code for curing cancer would be amongst the most significant developments expected in 2012. do you agree with that? >> yes, i do. i don't know about the 2012 piece. i'd have to think about that. >> right. >> but as i said before, the wi-fi was not anpected inn from unlicensed policy when it was first done, and i think there's every reason now to expect that we'll get unexpected innovations in the future from a new platform for innovation. >> so, and we had a hear anything this committee -- hearing in this committee just a couple of weeks ago where one of the fcc's top engineers testified that advances in technology are not likely to obviate the need for guard bands anytime soon. do you believe that the fcc

should put licensed spectrum at risk for interference by reducing the size of the guard bands? >> until we can change the law of physics and eliminate the possibility of interference -- >> yes. >> -- we're going to have to have forward band. >> yeah. and so is, again, is there a process that gives people deadlines in terms of resolving these technical issues? because we are congressional experts, which is an oxymoron compared to real experts. and when you put engineers in a room, we have to, you know, just remain silent and listen. so the real question, how timely are the deadlines given here to resolve these issues? because i think it's almost like a homeworker assignment. you've got a deadline, you've got to get that answer, and then we'll find a tie breaker to make a judgment as to who's right and

who's wrong. and i don't know what exactly the timelines are here, but it just seems to me that the economic benefits are so overwhelming while the risks, actually, to the broadcasting industry could be great. but to resolve it. >> that's a fair question. if i could answer it briefly, comments in response to our notice are due, i believe, in january, replies due shortly after that. at my level, the commissioner level and the staff level, we've been encouraging all the industries to do the hard work to put us in the position. from there as we have in past proceedings, we will move forward in exactly the direction you're suggesting, which is getting engineers together from the different industries and sitting there until we get answers, and we'll have a timetable, and we'll drive it to conclusion. it won't be the first time we've cone -- done that. >> it's win/win for broadcasting and for wireless.

>> thank you, mr. chairman, commissioner mcdowell referenced the title ii proceedings in light of the wicket conference and device. so, chairman genachowski, why is that title, title ii still open? >> well, it's common to have notices of inquiry stay open where there's public interest in commenting as there has been here. we don't see any uncertainty being created by that proceeding. the sector is actually quite strong. investment, innovation are going up. to the extempt there's any uncertainty, it's coming from the verizon litigation. and as i've done before, i would call on verizon to withdraw its litigation. that would increase certainty and allow us all to move forward. >> well, have you had any --

>> at the time that it was first floated in the summer of 2010, there was an incredible amount of anxiety expressed from the investment community over that docket. it frequently comes up in conversations that i have with our international counterparts and diplomats internationally. so i think it does create uncertainty, um, and the late gaition against the -- litigation against the order regarding the innovation of network management, actually, i don't think is crediting the uncertainty. the uncertainty was created by the fcc in this place. there was no evidence of any failure at all to begin with.

>> mr. chairman, have you had discussions about reclassification of broadband services i via title ii if the c loses the case? >> no. we're focused on a framework that's in place, that's working, that's driving private innovation across the ecosystem. i think if we can preserve what we have right now, it'll continue to be a win for the country. >> are well, do you feel like you have the authority to reclassify broadband services under the title ii and subject them to title ii regulation? >> our general counsel at the fcc has said consistently that we do have that authority. >> okay. when do you plan to close that title? >> we don't have plans to close it. that's been a forum for public input and participation, and as i said, we're seeing a sector that's very strong and growing and leading the world. >> so you plan to just leave it open as long as you want to? >> we've been -- it's a forum for the plunge to comment, and they have done so, and i think

they'll continue to do so. >> yes, sir, i think you're going to hear a lot of public comment. i think people are going to be weighing in readily. i think it does not serve our community well, and i hope that we can provide some certainty. the task force, and commissioner pai, i appreciated that you mentioned that. i know that you're looking forward to working on that task force. so, mr. chairman, is the task force going to be focused on modernizing an obsolete regulatory framework so that we can finally rationalize this new marketplace of converged services and hasten the ip transition to next generation

networks, or do you intend to use it to put legacy leg -- regulations on new technology? so where are you planning to -- >> our goal really since i arrive inside 2009 was to focus on unleashing the opportunities of broadband and addressing all of the policy issues associated with that. we did that through the universal service funneled reform and creation of the connect america fund, the disabilities act implementation, etc. we will continue as we've been doing to drive the rollout of digital networks, digital ip networks. it's very exciting for the country, and we need to see continued private investment in that. we also need to make sure that in the world, in this transition -- >> let me interrupt there just a second. >> do you think it's necessary for you to the drive it, or do you think that the free market drives it? >> i think the free market is driving tremendous investment. i think we create a climate for investment, and we have to make sure that any rules we have in place that shouldn't be there

get taken away and things -- >> can i submit a list? >> -- numerous public safety and dedecision are in place. >> commissioner pai? five seconds. [laughter] >> i'll try to be very brief. i would support the chairman in formation of the task force, look forward to working with him to make sure that we have a framework that incentivizes, not penalizes, investment in -- >> well done. mr. chairman, i have one question that i'm going to submit for the record. >> thank you. chair now recognizes the gentleman from pittsburgh, mr. doyle. >> thank you, mr. chairman. and i want to welcome the commissioners back to our committee room and tell you that it was good to see all of you last week in your committee room. mr. chairman, just very briefly because this is a little off topic, but i have to ask, can you give us any update on special access? >> sure. it won't be the first time you asked that question. [laughter] as you know, we've been working as a commission on what we've

announceed will be the next step, a data collection order. i don't know if this has been announced, but i can tell you now that order has been voted, and as soon as it's finalized, it'll be issued, and we'll be moving forward in the special access areas in the ways we've announced. >> excellent. so what's the -- so all commissioners have voted? >> yes, it's all been voted, and the staff is finalizing the process to release it. >> okay. thank you very much. mr. chairman, i want to ask you about the commissions' work on designing the forward auction process with regards to the eligibility of competitive wireless carriers to bid for a license. i think it's very important that we insure a competitive wireless marketplace, and that requires all carriers to have a sufficient amount of spectrum to be able to offer comparative quality of service. that means being able to deploy 4g lte service in a reasonable time frame and being able to avoid frequent dropped calls. so for every carrier the ability

to secure spectrum licenses means the ability to stay competitive with other providers. so i think it's important, mr. chairman, for the fcc to be able to give all potential participants a fair shot at the bidding process. i'd like to see more carriers have lte capability and more robust coverage. that means the fcc has to design auctions in a way that will maximize the competitive benefits of this resource. mr. chairman, i do want to enter into the record before i go further a letter from the competitive carriers' association addressing the issue of bidder eligibility, because i think it does a good job in laying out the concerns these carriers have with being able to participate in the auction. >> hearing no objection, so ordered. >> be thank you. and there should be no confusion on this point. the legislation passed by congress gives the fcc flexibility to design auctions in a way that allows everyone to participate including smaller carriers. i want to urge all of the

commissioners to take advantage of the tools at your disposal to protect competition. so, mr. chairman, let me ask you, is this an issue to which you will give close consideration? >> yes. and i agree with the way you characterized it. >> thank you. mr. chairman, i want to you a little bit about media ownership too. you might remember i brought up this issue in a previous hearing, and i comet to be very concerned -- i continue to be very concerned about moving forward with relaxing cross-ownership rules again before we complete an fcc analysis on the impact such a rule would have on changes in female minority ownership. mr. chairman, the fcc's incentive auction nprn envisionses that television stations could engage in channel sharing in order to free up spectrum for reallocation. have you considered the impact of this proposal on media ownership and diversity in light of the order that you're currently circulating? >> we do think that the incentive auction process will provide new opportunities for

minority owners to, um, continue providing service in a difficult marketplace. by receiving money for sharing channels or by potentially receiving money from moving from uhf to vh, the -- vhf. we're continuing to work through those issues. >> yeah. i think some are just concerned that we get -- we understand what these impacts are before we move forward, because the concern is sometimes after a ruling's made and you continue to study these issues, it's very hard to get the genie back into the bottle, so to speak. so i would just urge you and the commissioners to take a closer look at the impact of these auctions in height of your media ownership review. and i thank you for the work that you're doing. and, mr. chairman, with that i will yield back my time. >> at this time recognize the

gentleman from louisiana, mr. scalise. >> thank you, mr. vice chairman, and appreciate the hearing and especially the five commissioners for being here with us. i want to start by looking at the congressional budget office estimate on the spectrum auction. if you look at the nprm, the estimates are that it would raise about $25 billion from the broadcast incentive auctions, and just want to get your take on what you think can be achieved if you look at the cbo report. does that match where you think you'll be? i'll start with the chairman, get your take on that. >> well, both cbo and omb have looked at the proposal. they scored it, and certainly it's to the in our expertise to revise that scoring. we're certainly focused on running an auction that generates very substantial revenue for first net and beyond. one of the key factors in that

will be broadcaster participation, and that's why we're all working together with the industry and with others. while we're happy to see the group form that we heard about from chairman walden of broadcasters who says, you know what? this makes sensuous and we want to work proactively because that's the best way to free up the most amount of spectrum. >> commissioner mcdowell? >> i'm a little bit more cautious. i hesitate to use the word pessimistic, and i hope that i'm proven wrong oz r as to -- as to how much that will actually raise. you have to keep in mind that in the markets where we need spectrum the most, these are the largest cities, and that's what we're the most spectrum-constrained for mobile brand. tsa also where broadcasting is the most profitable, because there are more eyeballs condensed, you know, compacted into a small area like new york city where there are 28 tv stations. so in order to yield 60 megahertz, let's say, at 6

megahertz per tv station, that's ten tv stations like these that would have to go dark or channel share. in a new york city, for instance. that's more than a third. that's a lot. i hope that's the case. i hope it actually happens, but i'm not convinced yet that it will. so i think we need to be more cautious and sort of fiscally conservative with some of the assumptions that went into the cbo or the omb estimates. >> and if i could just emphasize because, you know, there are some components of the bill for public safety, other expenditures. but another part of that legislation was to provide some revenue to pay down the national debt. $15 billion is right now estimated to be raised that would go towards paying down the debt. so as you're conducting the auction, clearly, we want to free up more spectrum, and ha's going to create jobs, it's going to allow us to do a lot more things we can't do today, but it also allows us to have some real

money to start paying down the debt. so i would like to emphasize that as well. want to talk about the dubai hearings, and i know you've touched on it, both chairman genachowski, commissioner mcdowell. want to thank you both for representing the united states in those talks, and we're going to be following it. and i was glad that we passed the legislation out of the house, now the senate and house have both spoken very loudly in a bipartisan and unanimous way that we oppose any attempt by the united nations to take over parts of the internet, and we want to see it continue to be an open and free model with a multistakeholder approach. do you see some -- and i think, commissioner mcdowell, you touched on this some in your opening -- do you see some hypocrisy where title ii is opened here in the united states, and yet we're in dubai telling them not to use this outdated approach to trying to grab more pieces of the internet internationally, but here in the united states there still seems to be this open-ended question

with title ii open that maybe sends a mixed signal? i wonder if either of you would like to -- >> excellent question, and i'll try to be diplomatic with the response, because we're at a crucial time in these negotiations. the answer is both yes and no. yes in that we say interaction, we want to keep government out of the space, that the multistakeholder model is the way to resolve conflicts, and it has worked very well for consumers ultimately. no in that one of the messages being put forth is each nation has the sovereign right to determine what its internet policy should be, and there should not be an international regula toying overlay -- regulatory overlay. i happen to think it's more intellectually honest and consistent to say that government should stay out of the space altogether as much as possible, and we should, therefore, close things like the title ii docket. >> chairman genachowski?

>> in both cases the goals and the actions are designed to preserve internet freedom and opennesses, to preserve the internet as we know it and to insure that no gatekeepers, public or private, interfere with internet freedom so that we have the innovation and free speech that we've seen from the internet for the last 20 years continue for the next 20 years and beyond. >> thank you for your time and answers, and i yield back the balance. >> gentleman's time's expired. chair now recognizes the gentlelady from california, ms. matsui. >> thank you, mr. chairman. i want to thank you very much for holding this hearing today, and i want to thank the commission for being here today. and, well, as you know, you're going to be arguably undertaking probably the most complex spectrum auction in history, and i think you all know it needs to be transparent. and i believe congress must work closely with the commission to insure the auction's success.

mr. chairman, the middle class tax relief and job creation act directed the fcc to auction up to 120 megaholg are speumahtz of spectrum from the broadcast incentive auction. if we don't see strong participation from the broadcasters during the incentive auction process, um, that reaches congress' goals, does the fcc have a fallback plan? >> well, our focus is on implementing the statute. it's a very good idea to provide a mechanism to reallocate spectrum from existing commercial to prbd. i say that not only because congress passed it, but because we originated it in our national broadband plan in 2010. i think caution a good biword here, but we're seeing more and

more reason to be optimistic. and my hope and expectation is that we'll see a successful process. certain bly, we're optimizing all of our work to make the process simpling understandable and allow broadcasters to be in a position where they can make an economically-rational decision. >> okay. in case, just in case, um, it does not work out quite the way you feel it should work out, um, do you have a next step at all? i mean, where do you look for the next tranche of spectrum? i'm sure you're looking at this not just in a linear way. i mean, that's not the way it operates here. you're thinking about other opportunities here. so, um, where do you see the next tranche of spectrum come from after the upcoming incentive auction? are you looking at the 1755 to 1850 bands? >> yes. it's a great question, and we don't see these as mutually

exclusive at all. >> right. >> and so 1755, the 3.5 gigahertz item we will vote on later today that we're very excited about, 40 megahertz of spectrum that the commission voted on last night to free up, 30 megahertz of wcs, we see other opportunities for government spectrum. so this is a very high priority of the commission. we all degree on it. and whatever happens with incentive auctions, we will continue to move forward relentlessly on all of the other opportunities and policies. on the incentive auction piece, i expect it will work. congress will continue to be interested. i think what congress has done in the law is to say this is a band where we expect to see a significant amount of spectrum freed up for mobile broadband. >> right. >> this is how we would like to see it work, and i expect that the broadcast industry will get that message. >> okay. commissioner rosenworcel, you know, spectrum is going to be a

big part of the budget debates in the coming years, so we'll need to generate new revenues for the treasury. as stakeholders continue their effort for a long-term solution, do you see opportunity for account revenues that can be generated? at least probably in the short term some sharing opportunities? what are your ideas on ways to generate revenue from sharing and ways to incentivize agencies to relocate? >> with respect to spectrum, i think demand is only going to continue to grow, so we are going to need to have an all of the above approach. that will include things like sharing. and as you are probably aware with the 1755 band, we are trying to identify if that is viable for sharing with the 2155 megahertz band that we need to auction within the next three years. >> right. >> with respect to existing federal users, i believe that agencies are mission-focused. they use their spectrum in service of their missions, but they lack today incentives to

use that spectrum efficiently. i think it is time that we infuse those missions with rewards for using their spectrum efficiently. and if we do that, we are hirely likely -- highly likely to be able to cull more spectrum back from federal users over time and repurpose it for commercial use. >> so in working with some of the agencies and talking with them, i think they understand that. but this idea of relocating en masse is something they can't do. not in the short term anyway. so as we move forward, i think we need to be very creative about how we incentivize the agencies to move forward in a way that is timely by trying to figure out more incentivizing ways to do this. and also incentivize the sharing is maybe a interim step as we

move forward. and i think what i'm seeing is we need to have a long-term process with certain benchmarks along the way so there is a sense that we are moving forward. so anyway, i thank you very much for, you're doing, and i yield back my time. >> chair recognizes the incoming vice chair of the subcommittee on communications and technology, the gentleman from ohio, mr. latta. >> thank you very much, mr. chairman, and thank you very much for conducting the hearing today and, again, to all the commissioners for appearing before us today. i have an explanation from cisco why spectrum above 5 gigahertz is better than even the white spaces, and i request unanimous consent to submit it for the record. >> without objection. >> thank you very much, mr. chairman. commissioner pai, the statute identifies an additional 195 megahertz of spectrum above 5 gigahertz for unlicensed use. in light of that, does it make sense to jeopardize the auction and the public safety network by

pulling out for unlicensed use of broadcast incentive spectrum ideally suited for licensed wireless broadband? >> well, thank you for your question, congressman. as i stated in my testimony, i am very bullish. i've spoken with cisco and other players in the industry who have worked on and helped develop super wi-fi technologies that would be compatible with 5 gigahertz band, ac standard which i mentioned earlier. but the basic reason i'm bullish about 5 big hertz in particular is this: if you think about what the ideal use for unlicensed is, it's fast speeds for data transmission within a relatively small area such as a home or an office. well, 5 gigahertz is perfect for that because you can as the spectrum act envisionses dedicate gigantic channels of 160, even larger megahertz for the sole purpose of transmitting data. and additionally, i'm not an

engineer much to my parents' chagrin, but i've been informed the characteristics don't travel through walls or very far, so you don't have the risk of interference that you might have lower in the band. so if you have gigabit wireless throughput thanks to 5 gigahertz, that is a tremendous opportunity that i think we should take advantage of. so i'm pleased the spectrum act requires the commission to make the rules process on 5 gigahert -- gigahertz, because i think this is an area where we could really see some bang for relatively little bucks. >> thank you. commissioner mcdowell, the administration has talked a lot about the need to bring additional spectrum to market for commercial use, and your view has their behavior matched the rhetoric, and how important is the secondary market in dealing with the spectrum crunch? >> two issues, actually. one would be spectrum sharing in

the federal spectrum space, and the other would be secondary markets. so to answer your secondary markets question first, i think we could do better to insure a freer and faster flow of spectrum in those markets to make sure that spectrum flows to its highest and best use in as unencumbered a way as possible. secondly, i would love to see the executive branch federal users of spectrum actually do a better job of offering up spectrum for auction rather than sharing. sharing can be very beneficial as we've just discussed, unlicensed use that's a form of sharing, but there's no substitute for exclusive use licenses. i think congress can have a role here in maybe trying to provide federal users of spectrum an incentive to get off their spectrum. it's an opaque process right now. the law says it costs more to move them off their spectrum

than it would raise at auction, you can't move them. so let's coo do what we can -- do what we can and try some carrots. >> thank you. chairman general genachowski, ie nprm it talks about a geographic -- [inaudible] going back with mr. dingell who was also talking about, you know, we're located from northwest ohio and, of course, growing up as a kid we got canadian television stations in our area and vice versa for canadians. what is the definition and how would you define that geographic area? because you say that multiple blocks of spectrum are available in a geographic area. what is a geographic area? >> i think that's a question that we've teed up for comment and input in our economic proceeding. if i could say one thing on the border issues, these are very important issues that come up every time there's any

transition in spectrum whether it's commercial or public safety. and we have very good processes in place both with canada and mexico to negotiate through these issues, and in decades of work our countries have solved every one of them. and so i fully expect that that will happen here and that we will address the border issues in a way that doesn't interfere with the incentive auction. ..

communications performance reliability in the wake of sandy is a great importance. that's why my democratic colleagues, sent a letter to you requesting a hearing following this storm. it seems communication services fail to perform as needed during and after the storm, power outage and floods disrupted many types of communication including wireless, tv, telephone and internet services. according to the fcc the storm knocked out a quarter of the cell towers in an area spreading across 10 states living millions of users unable to make calls. i have three questions i wanted to ask chairman genachowski. first, what are you doing to ensure the reliability of the commute issue networks during and after natural disasters? more specifically, what efforts are underway at the fcc to identify and highlight best practices, and where necessary, to address potential

vulnerabilities in our communications infrastructure? all that in a minute or two. >> let me try to cover a little bit of ground. the devastation in new jersey in that region was tremendous, and i want to note that our 24/7 operations and at the fcc played in this disaster as it has in others a very important role in the recovery effort. new jersey in particular. we were engaged within new jersey broadcasters association and efforts to get fuel to cell towers as quickly as possible working with state and local authorities in new jersey as well as fema. we did receive your letter and the fact as you might know we've announced field hearings that will be starting in january. that continues and effort that's been underway at the commission to ensure working with state and local authorities the resilience and reliability of our

communication networks. the disasters show that communication devices, mobile communication devices are interwoven in our lives. they are how we communicate with our families, with emergency service providers, our businesses, and we need to constantly look at these issues, make sure we have in place systems, including best practices, that give us a reliable communications networks. we have to take seriously the interconnection between our communications grid and our power grid, which has their own issues, and address what we need to do to make sure the communications networks stay up. >> let me move on because i want to ask two more things. if those field hearings have not been scheduled come is there someone to court with our schedule and the house? we would like to be able to be there, if that's possible. >> we will work with you on that. >> large numbers of people, as you know because they didn't have power turn to the radio and other broadcasting, you

mentioned the broadcasters. audiences were up 247%, 195% in middlesex, part of addition. how are you would with broadcaster to ensure that they continue to play an important and robust role in information sharing during natural disasters like sandy? >> i agree with your point, and we saw both tv and radio play important role in disasters at the standout as we see mobile and new internet social media play an important role. i agree with craig fugate that these multiple platforms, together, can help improve our public safety profile all around. broadcasters, one of things that we do during crises like these is make sure that when they have power or other issues affected by the storm, we immediately do what we need they can stay on the air. during this disaster we granted a number of what are called sdk, special temporary authorization to make sure rochester stay on the air.

i hard thing for broadcaster do. i want to take a moment to note the broadcasting industry, the global industry, the cable industry and the worst parts of the strong each of those sectors had people on the ground at risk to their own personal safety. >> let me just ask lastly about wi-fi, when many citizens in the states lost access to wireless internet. i understand the wi-fi hotspots were offered for free and public areas during and after the storm and became an alternative for internet access. does is highlight the approach about the need for balance spectrum policy that includes unlicensed uses? >> yes. >> two seconds for that. >> yes, sir. >> all right. thanks so much. thank you, mr. chairman. >> were you able to get the questions and you needed yes. >> thank you. >> we look forward, chairman, to the results of your hearings out there as well. i think the committee on both

sides are very concerned about response in a disaster situation. as we talked after the nationwide eas test which initiative for the first time, didn't quite come out as we would all hope. these things matter a lot, so thank you. we'll go now to the gentleman from california, mr. bilbray, for questions. >> mr. chairman, i like to fall upon the questions questions from the gentleman from michigan, mr. dingell. mr. chairman, the conversation with mr. dingell has me concerned but i don't know what part of the country you hail from -- >> i was born in boston, grew up in new york. >> okay. can you imagine what the response would be from the people in boston or new york, or washington, d.c., if they try to make a phone call and someone in a foreign language, or in english, notifies them that

france, the paris cell phone company to confiscate your call and that if you want to make this call you need to call this number and get a license, basically get an account with them. that is the kind of response that people a long our international borders get and have in the past the can you imagine what my constituents, or my brother says to me, when on the part of the united states, why is a foreign corporation confiscating my calls? so i'm very concerned when, first of all when mr. dingell brought this issue up, it didn't seem to be on your radar, quote unquote, and it also concerned when you state that we have a history of great cooperation with our neighbors to the north and the south. i want to make sure today that you are all aware this is an issue that you need to address, and the people along, both north

and south are just as much a part of the united states and have as much right to access to telecommunication a summit in new york, boston or d.c. your and should not have to accept the fact that, well, you're on the border so you just accept the fact that foreign companies can confiscate your calls. so that said, and i think i made it clear, what conversations are you having today with the united states and mexico and canada? >> well, i'd like to follow-up with you on the issues you're mentioning and learn more. with respect to the incentive auction transition and border issues that will come up with broadcasters who may have to move to stations where their concern, and understand these concerns with potential for interference, we have begun the process at a staff level with both mexico and canada to work

those issues out. these are similar issues that have been worked out in public safety bands, and in other bands but i look forward to working with you to make sure we fully understand your concern. >> i mean, it's essential issue. my own town at least half of the city cannot make cell phone calls at certain times because of foreign interference. we finally worked that out with some deals, but how close are we to resolving these issues? >> i would say we're at the beginning of the process with respect to incentive auctions with canada and mexico. >> what incentive is there for canada and mexico to cooperate with us on this issue? >> ultimately, they seek to put in place spectrum related services in their countries that have counter balancing effect on people who live on the u.s. side. so it's in both countries interests in order to maximize their own services to reach

accommodations at the borders. it true for both commercial and public safety. i certainly wouldn't want to overstate how easy it is to get through these issues, resolve, but i do know over the last four years, we have resolved some very complex issues and our expectations will be able to do here and we work hard to do so. >> let me say for the record because everyone is talking about, you know, the situation with sandy. first of all, somebody who had family who lived through katrina, and i was in there after katrina, and in california, that lived through the fires in san diego, the reverse 911 and the cell phone capabilities work extraordinarily well in san diego. that technology was a lifesaver and worked well. the fact is those of us who were hit by hurricane katrina found that it was much more probable that when your electricity gave out, that your cell phone worked enough to be able to call and

say you are out of power. i know for a fact. transformers were replaced and it was because of that public-private partnership that we had during those disasters both in san diego and down in the gulf, that have the ability to public-private was essential. so i just got to tell you with everything, the problems we pointed out, the fact is it was much more probable after katrina that you had phone service than if you had power service. and so those who want to talk about the old hardline technology as being dependable, it definitely was not more dependable than a new technology. so with all the problems they talk about say, i would just say, ilogistics as someone who lived through to disasters, the system worked well. my concern is on you. the people along the borders of the united states put up with a lot goes the way they live. they darn well shouldn't have to put up with foreign corporations or foreign governments

concreting the communication system. and you, all of you have as much responsible to make sure that doesn't happen again, make sure they have equal access, to their technology, government and system as someone who lives in kansas. i yield back. >> gentleman yields back and i appreciate the chairman's willingness to continue to work of our colleagues in california in the future. now recognize the gentlelady from the virgin islands for five minutes. >> thank you, mr. chairman. and thank you to the commission for being here this way. i guess a lotf myquestions, at least part, we talked about the importance of the radio and television broadcasters during sandy, and as a person who comes from an area that is prone to hurricanes, those are important to us. congressman pelosi talked about the importance of wi-fi and we know that the cable companies were able to use wi-fi and

provide services so that family could communicate during sandy and communicate with emergency services. so just some of you already indicated your commitment to this but i just wanted to assure from each of you you are committed to promulgating rules that will promote the use of unlicensed technology in the guard bands but i think, commissioner pai on your left, but each of you are committed to promulgate rules that were promote the use of unlicensed technologies in the guard rail? >> that was our proposal. and we are now seeking comment that we've laid out the commission's proposal which is to do that. >> and again on the issue of diversity, which is at least two questions were asked regarding this already, but continuing

concern to the tri-caucus is a need for more minorities in ownership decision. are you concerned, chairman genachowski and maybe commissioner clyburn, that the television stations most likely to offer to return the spectrum in the voluntary and incentive auction might also be stations that offer unique and more often, more ethnically diverse programming? >> i'm concerned in general about diversity, its fundamental obligation of the commission. i do think the incentive auction provides a new economic opportunities for minority broadcasters, foreign-language broadcasters, et cetera, because in a difficult market it creates opportunities to receive additional capital for spectrum sharing, over move from uhf vhf. and we certainly heard from members of themo